Chinese held US federal debt has reached a record $1.3 trillion. In May 2013 China bought $25.2 billion in US Treasury notes and bonds, according to Xinhua News Agency.

“US bonds remain one of the most attractive financial
instruments in terms of safety. Recovery of the US economy
strengthens the dollar, which is also a positive factor,”
Chinese experts are quoted by the Chinese News Agency.

China’s economy has been developing rapidly in recent years, with
its strong export business which resulted in large trade
surpluses.

In September 2008 China became the biggest foreign creditor of
the United States, surpassing Japan.

Purchase of American dollars and Treasury bonds then allowed
Beijing to avoid the appreciation of the Yuan and to support
Chinese exporters.

"In fact, China has been a large and stable source of demand
for US Treasuries, which has contributed to its low and stable
yields in the past years," Guo Feng, a senior economist with
Washington-based Institute of International Finance, told China’s
People’s Daily.

"Given the recovery in the US and sluggish economic growth in
Europe, I expect China to continue to buy US Treasuries in the
coming months," he also added.

The Federal Reserve is the largest holder of Treasury debt,
holding over $1,870 trillion at the end of May 2013.

China's foreign reserves hit a record $3,500 trillion at the end
of June, mostly in dollars. This year’s economy slowdown in China
has slightly tempered the pace of dollar reserve accumulation.